About N1.7tn of the total pension fund so far accumulated under the Contributory Pension Scheme had so far been invested in Federal Government of Nigeria’s securities.
Figures obtained by our correspondent from the National Pension Commission on Tuesday revealed that N1.7tn, which is about 63.07 per cent of the total CPS fund, had been invested in FGN securities.
According to the figures, the total pension fund as at June stood N2.73tn, which was invested in 11 major assets.
For instance, N275.58bn or 10 per cent of the fund is invested in local money market securities; N273.29bn or 9.99 per cent in domestic ordinary shares; and N171.87bn or 6.28 per cent in real estate.
According to PenCom, 3.99 per cent or N109.16bn of the total pension fund is put on state government securities; 2.61 per cent or N71.36bn on corporate debt securities; 1.33 per cent or N36.4bn on foreign ordinary shares; while 1.2 per cent or N32.68bn is invested in other assets.
Also, 0.85 per cent or N23.37bn of the fund is invested in private equity; 0.41 per cent or N11.2bn in open and closed fund; while 0.18 per cent or N4.8bn is in foreign money market securities.
The Director-General, PenCom, Mr. Muhammad Ahmad, said the commission had continued to regulate and review investment in pension assets by the Pension Fund Administrators.
In order not to leave the growing fund idle, PenCom had in its latest regulation on investment of pension assets, allowed the PFAs to invest the fund under their management in some allowable instruments, which they were expected to strictly adhere to.
According to the regulation, the PFAs can invest such funds in bonds, treasury bills and other securities (including bonds denominated in foreign currencies) issued by the Federal Government and Central Bank of Nigeria or agencies and companies owned by the government, provided that the securities are fully guaranteed by the CBN or the Federal Government.
PenCom also allows the PFAs to put the fund in bonds issued by eligible state and local governments or state government agencies or wholly owned companies, provided that such securities are fully guaranteed by irrevocable standing payment orders or external guarantees by eligible banks or development finance institutions.
The regulation states that PFAs can invest in bonds, debentures, redeemable or convertible preference shares and other debt instruments issued by corporate entities, including asset-backed securities and infrastructure bonds.
According to the regulation, the fund administrators can also invest in ordinary shares of public limited liability companies listed on a securities exchange registered by the Securities and Exchange Commission.
The fund is also allowed to be invested in money market instruments of banks and discount houses as well as commercial papers issued by corporate entities.
PenCom stipulates that the fund can equally be invested open or close-ended and hybrid investment funds registered with SEC.
It can also be invested in real estate investments through mortgage-backed securities and real estate investment trusts registered by SEC.
According to the guideline, the pension fund can be invested in supranational bonds issued by eligible MDFOs.
The PFAs can also invest in private equity funds and infrastructure funds registered with SEC; as well as global depositary receipts or notes and Eurobonds issued by listed Nigerian companies for their operations within the country, as certified and approved by SEC.
Source: Punch/Nike Poopola
